AboutDoctor Settlement Expertise 27 years of front line plaintiff`s trial lawyer experience in PERSONAL INJURY INSURANCE CLAIMS. Along with other attorneys and insurance adjusters, we have created a website to help injured people settle their own personal injury claims. With the help from feedback from hundreds of satisfied members, www.settlementcentral.com has become THE AUTHORITY for Internet personal injury insurance claim settlements. I am humbled and honored if people can benefit from my experience and current volunteer work in helping injured people. I hope I can explain things in a manner that is useful for the questioner. If not, do not hesitate to e-mail me and I will take a second shot at it! Best Wishes for your physical and financial recovery.
Experience
Life Experience: 27 years of front line plaintiff's trial lawyer experience
Organizations: American Trial Lawyers Association (AAJ)
Washington State Trial Lawyers Association
Awards and Honors:
I am humbled and honored everytime I am selected to help injured people. And when people give feedback that they have benefited from my experience and current volunteer efforts, then that is a double honor and award for me.
Question My husband and I were both hit by a hit and run driver in the state of New Mexico. We live in California. My health insurance company is saying that they will not pay any more until I sign these "Right of Reimbursement subrogation for Acts of Third Parties." This is complicated by the fact that it is an ERISA policy and I'm not sure what that means. Anyway, they claim that "benefits are not payable for any illness, injury...for which a third party may be liable or legally responsible. But the responsible party apparently is uninsured.
So, now I have my health insurance saying they won't pay until I sign those papers and until the limits of my auto policy are exhausted. Meanwhile, my auto policy has paid almost to the limit of my med-pay now, but my course of treatment is not finished and now they are asking me if I am covered under a health insurance policy. I have one, but since they have that language that the benefits are not payable when a third party is responsible does that mean that for all intents and purposes, I am not covered by a health insurance policy? I'm not trying to get paid twice or anything. I just don't want to be screwed. I'm afraid that the health insurance policy and the auto insurance policy will both refuse to pay until the other one does and I won't get my bills paid! Also, as far as the checks that the auto insurance company has paid through my medical coverage, can I cash those checks or will it mean that I am settling? PLEASE HELP! How should I answer these questions that the auto insurance company is asking? Also, I am getting disability. Do I need to report the checks that my insurance company sent to me for my medical bills to disability?
Answer Hi Mary,
Your case presents a very confusing mixture of a variety of insurance coverages, state versus federal subrogation laws, and disability on top of it all. There are SIX MAIN issues in your question, and the answers will lead you to do a bit of research with your own state insurance commissioner http://www.settlementcentral.com/links.php
I think what is going to happen to you (ERISA subrogation against your own insurance award) STINKS—and Congress is responsible. Thus, I am going to do some extra writing to make clear a very confusing situation. Hence, the added time needed for my response.
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ISSUE #1: SOURCES TO PAY MEDICAL BILLS.
You have three possible sources of insurance to pay your medical bills.
• First is your own auto insurance med/pay or PIP coverage. This has a limit in terms of both the dollar value and the time within which the medical treatment has to be rendered. Make sure that the limits your company talks about are the same as those on your insurance declaration page. Your PIP should pay until its limits are exhausted. UNTIL the limits are exhausted they MUST pay. I suspect that the reason they asked if you had health insurance was not so they would quit paying. It seems you are nearing the limits of your PIP, and rather than invade the limits of your Underinsured Motorist Coverage (UIM) they wanted you to bill your health insurer.
• The second source is your medical insurance. This was likely granted through your employer since you mentioned that it was an ERISA policy. This means it exists under and is governed by federal Employee Retirement Income Security Act of 1974. You should use this source for ALL of your medical care costs once your PIP is exhausted. Read and weep, however, when I show you below how Congress has truly screwed over those who have purchased their own Uninsured Motorist Coverage (UIM). As I will discuss below, YES, you MUST sign that document IF the requirement to do so is included within your particular plan (and it probably is).
• The third source is your own Uninsured Motorist Coverage (UIM). We would LIKE to see your UIM preserved for your general damages (i.e. pain and suffering, loss of enjoyment of life, etc.). But if there are no other sources to pay for the medical care, then we sometimes have to invade the UIM limits and pay from there.
The BAD NEWS about using your health insurance is that Congress has made it OK for ERISA plans to invade the body of money that you are due from your OWN UIM. Think about that for a moment: how in the world does Congress justify letting your health insurer take money that is yours SOLELY by reason of your having paid premiums all these years? Call your Congressman and your two U.S. Senators and push them for an answer on this.
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ISSUE #2: INTRODUCTION TO ERISA
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that governs most employee benefit plans, such as retirement plans and group health plans. ERISA does not require employers to provide employee benefit plans, but if an employer chooses to offer benefits, the plans must comply with the rules and regulations contained in ERISA (and its amendments).
Let's talk about ERISA now. Keep your cool as you read this because it will do you no good to get upset. But DO COMPLAIN to your representatives—loudly and publically and in writing.
As a result of the enactment of ERISA, and development of federal common law
mandated by ERISA, most of the traditional rights of insureds previously recognized against insurance companies are nullified. The evolution of ERISA, and federal common law interpreting ERISA, now control or impact upon practically all employee benefit plans, including employer-sponsored health insurance plans.
Congress could have left intact the state laws, but NO, they have allowed those competing state laws to be preempted by their "all rules made in Moscow" ERISA law. Hence, federal preemption is the key to why ERISA subrogation is different and more powerful than non-ERISA health insurance subrogation—and much more effective at SCREWING OVER the poor employees. It is because of the preemption provisions of ERISA that your health insurer has such tremendous leverage when attempting to subrogate against your own UIM—purchased with your own money!
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ISSUE #3: CAN ERISA TAKE YOUR UIM AWARD—THAT FOR WHICH YOU PAID?
ERISA allows employers the right of subrogation, so many group health plans contain what is commonly called “subrogation” provisions. Generally, these provisions state that the plan is entitled to reimbursement from the participant of any medical expenses the plan previously paid that the participant later recovers from another party responsible for those expenses.
It appears that Congress, in its infinite wisdom has allowed ERISA plans to take general damages awards from insured's OWN UIM awards. So you pay for auto insurance, and you purchase UIM, and then when you want to exercise your right to that money, Congress comes in and lets the ERISA plan take away your money? Yep. That is how it looks.
Courts have consistently held that UM or UIM benefits can be recovered under an ERISA plan’s subrogation agreement. However, the specific language and terms of the plans in question determine whether the uninsured motorist benefits are subject to subrogation.
I do not have any idea of the language in your plan, so you need to have an attorney who knows about ERISA take a look at it and determine whether or not there are grounds to defend against a subrogation claim.
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ISSUE #4: MUST YOU SIGN THAT RIGHT OF REIMBURSEMENT DOCUMENT?
The responsibility of the plan to make payment depends upon your exclusion section. Yes, Congress has allowed plans to exclude payments for health claims caused by the negligent or wrongful acts of another party. It should be clear in the exclusion section of the benefit agreements that the plan is not obligated to make such payments UNLESS AND UNTIL the employee signs a reimbursement agreement.
Once the employee signs that agreement, then the plan treats the payments that it is about to make as "advance benefits", subject to recovery via the subrogation reimbursement agreement.
There are plenty of cases wherein the courts have permitted the ERISA plan to withhold benefits in the absence of a reimbursement agreement signed by the plan participant. The courts have concluded that the plan’s interpretation of its provisions permitted it to do just that, and that the plan’s interpretation as not arbitrary or capricious.
By signing the agreement are you capitulating to pay your UIM for subrogation? THAT depends upon what that agreement says. Hence, another job for an attorney review. But in most cases, the courts have ruled that by signing the agreement, the employee participant was simply being required to acknowledge the existence of the plan’s reimbursement provisions and being committed to preserve the settlement funds until the claim for reimbursement is resolved. HENCE, no commitment to give away your UIM would be made in those cases that I read; but of course we have no idea what is in their proposed agreement—thus more attorney work.
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ISSUE #6: DO YOU HAVE TO NOTIFY DISABILITY ABOUT THE MEDICAL PAYMENTS?
In direct answer to your question, that will depend upon who is paying the disability and the rules they have established. My guess is that the mere payment of medical treatment bills is not going to trigger a requirement to report. The same should go for reimbursement of any other special damages reimbursements.
However, as for the general damages award, the source of your disability may wish to have that knowledge. So that you do not violate the law, before you blab to them about any UIM award, you best get some legal advice on that particular topic. The lawyer referral service run by your state or local bar association will furnish you the name of an attorney who will advise you for something like $40 an hour.
I offer no opinion on that topic. But I will say that at a seminar once I heard a trial attorney speaker state that most unrepresented claimants probably did not want the actual answer to that question. If they did not know, and later had to pay, that is one thing. But if they were told by an attorney that they had to notify the disability folks and thereafter refused to pay, their troubles could mount. Enuf said.
I trust that my extra time here has produced some information that has been of value to you, and thus I would respectfully request that you take the time to locate the FEEDBACK FORM on this site and leave some feedback for me.
